By Bill Geraci, CEO of MAGIC Health Insurance Solutions

I recently took a trip to see several of the sites mentioned in the song, “Walking in Memphis.” I saw ghost of Elvis on Union Avenue (Sun Records) and followed him up to the gates of Graceland. I also had the most amazing lunch on Beale Street. In fact, there was so much food left over I took about half of it home in a doggie bag.

As I was “walking with my feet ten feet off of Beale,” I heard a voice behind me. It was a very kind and humble homeless man. He said he could tell by the way I was walking I must have been an officer in the military. I told him I was enlisted in the Air Force. After a nice conversation about his (and his daughter’s) situation, he asked me for some money. I offered the leftovers of my lunch, and he gratefully accepted them.

Unfortunately, many employees don’t have the same spirit of gratitude as this kindly man had.

A recent survey found, “While 73% of employees have an employer-provided health benefits plan that includes prescription drug coverage, 80% said it is important that their current or future plan cover the cost of their and their family members’ specialty medications.”

What really stood out from this survey was the following comment. “Employers must have a sustainable strategy to provide a rich pharmacy benefit that is both cost-effective for the company, as well as attractive to current and future employees.”

How is it possible to provide “a rich pharmacy benefit” that is “cost-effective for the company,” when Specialty medications such as Humira can cost up to $84,000 a year or Tremfya $150,000 a year? 

This is an oxymoron.

Providers and members are absolutely oblivious to the cost of Specialty medications.


Because, like everything else with a health insurance plan, the true cost is hidden behind deductibles and minimal copays.

Who is going to pay for the “rich pharmacy benefit”?

I don’t know why, but the answer to this question seems to be lost on everyone.

Of course, the employer, ultimately, has to “pay the piper.” The buck stops with them.

The cost of Specialty medications is projected to increase by 12% this year. A similar increase is forecasted for 2022, as well. Furthermore, approximately 66% of the drugs that gained Food and Drug Administration (FDA) approval in 2019 were specialty drugs, pointing to a steady rise in usage. 

This problem is never going to go away. It’s only going to get worse.

Several years ago, we had a member who was being treated for cancer. The net charge for each chemotherapy treatment was approximately $15,000. The member was driving almost two hours to a well-known cancer facility for their regular treatments. We spoke with our case management company about how to reduce the cost of the treatments. They suggested getting the medication directly from the manufacturer, at a much-reduced cost, and have them infuse at a center closer to the member’s home.

When we offered this option to the member, they were very surprised to hear how much the medications were being marked up. Knowing the higher price was ultimately going to be assumed by the employer, they still decided to continue going to the cancer center.

This is what we run into every day.

Once a member meets their deductible, coinsurance, and copays, which isn’t hard to do with Specialty medications, they could care less about the cost of anything. If I’ve heard it once, I’ve heard at least a hundred times, “My insurance will pay for it.”

There’s a part of me that would like everyone to be responsible for the first $5,000 of their medical costs. It would be an eye-opening experience for them, just like when someone sees their COBRA rates.

Many would complain to the government, which would bring us closer to the disaster called “free” healthcare.

As we’ve all heard, “There’s no such thing as free!”

Only if more people were like the kindly homeless man at the beginning of this post; grateful for their employers who are trying to provide steady work, good pay, and the best benefits they know how to provide in a very competitive global economy.

Interested in learning more about how to control your health insurance costs and keep more of your hard-earned revenue? We created a FREE 6-part video series that educates you on cutting-edge strategies you should consider. Subscribe here and get the videos for free.

By Bill Geraci, CEO of MAGIC Health Insurance Solutions

I’m dead serious! We have several clients who still offer their employees $500 deductible health insurance plans.

We just conducted the renewal meeting with one of these employers. They currently have 59 employees on their self-funded plan.

Say what!? Self-funded with only 59 employees? They’re too small to self-fund!

They’re not “Johnny Come Lately” to this party. They’ve been self-funded for over 15 years and have saved a ton of money.

How much? Well, hold on to your seat!

We did an analysis to see how much they’ve saved over the last seven years, since 2013. Every other year we get fully insured quotes, just to make sure we’re doing our due diligence.

Not once was the fully insured plan less expensive. In most cases they were way, way more.

We estimated the employer has saved about $1.6 million. 

But wait, there’s more!

We showed the employer how much they could have made in interest income if they had invested each year’s savings in a 5% interest bearing account. This amounted to another $240,000 in potential, interest income.

Can we say $1.8 million in just seven years for a employer with 59 employees on the plan?

As we sometimes jokingly say, “We always do MAGIC but sometimes even miracles!” This is one of those “miracle” moments.

The owners had big smiles on their faces when we went through the analysis with them. Then suddenly, one of them asked, “How can we provide a free health insurance plan to our employees?”

I was stunned! I said, “You already have one of the best plans around. Why do you want to offer a free plan?”

As quick as a whip, he replied, “To attract and keep more and better employees!” This is someone who gets it!

So, we’re toying around with the idea of creating a high deductible plan where there will be no premium contribution from the employee and the employer will fund a portion of the employee’s Health Savings Account (HSA).

Why would we ever want government run healthcare when there are incredible employers doing amazing things like this for their employees?

Interested in learning more about how to control your health insurance costs and keep more of your hard-earned revenue? We created a FREE 6-part video series that educates you on cutting-edge strategies you should consider. Subscribe here and get the videos for free.

By Bill Geraci, CEO of MAGIC Health Insurance Solutions

Several years ago, we were given the opportunity to review the Health Insurance program for a very large school district. We were told the district was going to the voters, asking for funds to update or replace aging mechanical systems at a number of schools. We had also been told funds were so tight that teachers were actually buying classroom supplies from their own personal finances.

With well over 20,000 employees covered under the Health Insurance plan, the annual cost was over $200,000,000 a year. That’s “TWO HUNDRED MILLION – WITH EIGHT ZEROS MILLION – DOLLARS! That’s … a lot … of money!

When we began our review, we were stunned (and I mean S.T.U.N.N.E.D) to learn the school district was fully insured.

Say what????

That’s right! A 20,000+ employee group was fully insured.

Now, there’s nothing wrong with being fully insured. It’s the perfect solution for small companies or organizations that aren’t big enough to take on large risks or liabilities.

However, an organization with over 20,000 employees, being fully insured is unheard of. In my 20 years of helping employers with their Health Insurance programs, I’ve never seen it.

According to the Kaiser Family Foundation, 94% of organizations with over 5,000 workers are self-funded, and 84% of “all large firms” are self-funded.

So, the big question … “Why was this school district fully insured?”

We wondered if it was because the brokerage firm was making “tons” of money and didn’t want to stop “the gravy train.”

The normal commission rate for a fully insured policy is between 3% and 6%. The larger the group, the lower the commission rate. At a 3% rate, the brokerage firm could have been making $6,000,000. Even if this was close to what they were getting paid, this could have bought a lot of air conditioners and school supplies! Also, every time the school district’s premium went up, which was every year, guess what? The brokerage firm got a nice raise for basically doing nothing.

The members of the School Board were responsible for allowing this total mismanagement of taxpayer’s dollars. Both the brokerage firm and School Board should have been fired for malfeasance and a total violation of their fiduciary responsibility to the taxpayers.

And just like so many other things, the great citizens of this district were getting totally screwed.

In our Summary, we stated 10% could easily be saved by the school district becoming self-funded, because it was just a more efficient model. This would have saved the school district $20,000,000. 

With a group of this size, there were definitely individuals on the plan that didn’t qualify to be on it. So, we recommended doing a dependent eligibility audit. This was a no-brainer, and yet, in the information provided to us, we did not see that this strategy was ever recommended or implemented. This would have saved at least 1% or $2,000,000. 

Although the savings percentages are low, we’re not talking “chump change.” And never forget, we’re talking about the hard-earned money of this school district’s taxpayers. They deserved better!

We made other, numerous recommendations, including:

  • Negotiating direct contracts with local hospitals
  • Creating near-site or onsite clinics for employers and family members
  • International sourcing of expensive medications
  • And more!

We were absolutely confident the school district could save at least 15% or $30,000,000. If our ideas and strategies were implemented, there would be no need to go to the taxpayers for more money.

Not long after providing our recommendations, the School Board decided to do a “Request for Proposal” or rfp. All the big brokerage companies in the United States responded. When the review was finished, the School Board decided to award the new contract to –

Drum roll please ….

The same brokerage firm that had been keeping them fully insured.

You read that right. The same brokerage firm.

Was the rfp “just for show;” to show the taxpayers that the School Board was “doing its due diligence.” We’ll never know. Even so, as Elmer Fudd would say, “There’s something awfully screwy going on around here!”

Well, if you’re serious about trying to control your Health Insurance spend, don’t continue down the road of “doing the same thing and expecting different results.” If you’re ready to stop the insanity and partner with someone who is absolutely committed to saving you every penny possible, give us a call. We’d love to work with you.

We can be reached at (844) 800-MAGIC.

Not ready to call us yet? That’s OK. Here’s a FREE 6-part video series that shows you cutting-edge strategies on how to control your health insurance and keep more of your hard-earned dollars. Subscribe here and get the videos.

By Bill Geraci, CEO of MAGIC Health Insurance Solutions

My mother was an early breast cancer survivor. Even with a tough course of treatment, a mastectomy, and maintenance medications, she lived a good, long life – 91 years. As anyone will tell you, she was a spunky, sassy, strong-willed, freckled-face, red head, and I loved her. She was my mom, and I miss her a lot.

About 1 in 8 U.S. women (about 13%) will develop invasive breast cancer over the course of her lifetime. The chance that a woman will die from breast cancer is about 1 in 39 (about 2.6%). Since 2007, breast cancer death rates have been steady in women younger than 50 but have continued to decrease in older women. From 2013 to 2018, the death rate went down by 1% per year.

Just the sound of the word “cancer” creates fear and dread in most everyone. It’s like a totally innocent person getting a death sentence. No one asks any questions. We just do what we have to so the person can recover and live a good, full life, just like my mother did.

The cost of cancer

Unfortunately, there are those in the Healthcare industry who know and take advantage of this situation. They charge exorbitant amounts of money, knowing no one is going to question them. After all, are we going to put a price tag on someone’s life?

So, it’s a delicate, balancing act we must perform to keep the Healthcare industry honest.

In late 2019, a member of one of our plans was diagnosed with breast cancer. Last year, she successfully went through surgery and treatment. Early this year, she went through reconstruction surgery.

The total charge (before any PPO discount) for the reconstruction surgery was $133,257.46. What was so stunning about the bill was the cost for the breast implants – $77,085.44. The cost of the surgery was $38,668.00.

Get our free, 6-part video series and learn cutting-edge strategies on how to control your health insurance costs and keep more of your hard-earned revenue. 

Doctors and hospitals will always respond to allegations of excessive charges that patients don’t ever pay the billed charges. This is correct. If the doctor or hospital are “in the network,” there is a discount. In the case of this reconstructive surgery, the discount was $75,956.75 or 57%. This left a net bill of $55,379.25.

A quick Google search will show you, “With health insurance, out-of-pocket costs for breast reconstruction add up to a few hundred to several thousand dollars. In some cases, costs can hit $10,000 to $12,000 or more.”

Our hospital’s net charge was five times the average amount.

Our Solution

So, we did what we always do, ask for an independent audit of the bill, and they recommended a payment of $32,161.16.

Having dealt with this hospital in the past, we fully expect them to send the balance of the bill, $23,218.09, to the member. This is called “balance billing.” At first, the letters from the hospital are polite and business-like. However, they soon turn threatening, which of course, puts fear in the heart of the member. The hospital can count on the member going to the employer, complaining they didn’t ask to be put in a situation where they could be sent to collections or even sued for the balance.

This same hospital once sued seven members of our plans for similar situations. When the Court asked for justification for such extreme measures, the hospital decided to settle out of court, forgiving all the balances.

Our auditor is willing to put their reputation on the line. They are willing to defend this member from being harassed by the balance bill process with this hospital.

There are egregious charges in the healthcare system. None are worse than with cancer.

Because of this, the ultimate payer of these charges, the employer, has to have someone who will protect their company and their bottom line.

Are you working with a broker or consultant who is wiling to roll up their sleeves and go to battle for you?

If not, give us a call at (844) 800-MAGIC. 

You, your company, and your bottom line no longer have to be at the mercy of the system.

We will show you how to take back control.